SkyCity probe by AUSTRAC related to historic transactions
A probe into SkyCity Entertainment is focused solely on the company’s Adelaide operations, with VIP earnings understood to be at the centre of investigations.
NZ Herald reports that JMI Wealth director Andrew Kelleher said that the allegations were historic, dating back to the last decade.
SkyCity is a dual-listed NZX and ASX company “so the issues around the investigation of SkyCity activities came to light Monday and share prices in Australia fell 6.5 per cent.”
The Australian Transaction Reports and Analysis Centre said it had identified potential non-compliance by SkyCity Adelaide with the Australian Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007.
“So to put some context around this, firstly, they are historic allegations,” Kelleher said.
“This refers back to 2015/16, which is quite some time ago, and 2018/19, so we have no idea how long this investigation will take.
“It could be quite lengthy and it refers to SkyCity Adelaide’s VIP area earnings, which I believe is where the issue is.
“That represents approximately one per cent of the group earnings, so you wouldn’t expect on that basis any potential resulting fee to be material. We don’t know yet, but that’s the expectation.
“It begs the question: is there risk across the rest of the business?
“New Zealand does obviously have a different regulator. To the best of my understanding, SkyCity has invested quite a lot in the AML and major client processes.
“It’s not just SkyCity,” Kelleher noted.
National Australia Bank, Crown Perth and Star are all facing the possibility of multi-million-dollar penalties for potential breaches of anti-money laundering laws.
Kelleher noted the investigation news emerged on New Zealand’s Queen’s Birthday holiday.
SkyCity said the potential serious non-compliance included concerns relating to ongoing customer due diligence.
“These concerns have been identified in the course of a compliance assessment which AUSTRAC commenced in September 2019 focusing on SkyCity Adelaide’s management of customers identified as high risk and politically exposed persons.
“AUSTRAC has made clear that it has not made a decision regarding the appropriate regulatory response that it may apply to SkyCity Adelaide, including whether or not enforcement action will be taken.
“AUSTRAC has indicated that it will request information from SkyCity as part of its investigation.
“SkyCity will fully cooperate with AUSTRAC in relation to those inquiries and with the investigation of SkyCity Adelaide.”
The company said it took anti-money laundering responsibilities and obligations seriously.
“SkyCity has processes and practices in place in its business to detect and prevent money laundering and continually reviews these to ensure it meets all anti-money laundering requirements,” the company said.
A SkyCity spokesperson revealed the business had no further comment to make, with chief executive Michael Ahearne not discussing the issue further.
SkyCity bans junkets after Crown report
Last April, SkyCity announced it was immediately banning junket operations from its casinos, deciding to bring international VIP business in-house, following the conclusion of a strategic review into the company’s International Business division.
The ban follows a decision by Crown Resorts to suspend its junket operations, shortly before the release of the Bergin report, which found Crown unsuitable to hold a casino licence for its Sydney casino.
SkyCity said it has determined to permanently cease dealing with all junket operators and will instead operate its International Business under a revised operating model.
That model will see SkyCity “deal directly with International Business patrons after appropriate Know Your Customer and customer due diligence requirements are satisfied.”